A prominent industry trend in recent years has been the increasing number of advisors who have left the wirehouse channel to form their own firm or join an existing RIA in the independent space. This movement gained strength as a long list of myths about going independent have come undone, including the notion that such a move, while attractive in theory, makes it more difficult for top producers to generate as much revenue.

According to this fiction, dealing with sales quotas, proprietary products and messy bureaucratic management structures, while bothersome and sometimes harmful to an advisor’s practice, are, in effect, necessary evils, since the wirehouse world was more lucrative. It’s nonsense.

Bottom line: Though transitioning a retail financial advice business is not without obstacles, successful advisors have proven that independence can be every bit as lucrative in the long run as the wirehouse model, if not more so.

But with the Department of Labor (DOL) poised to release a rule that will change the definition of ‘fiduciary’ under The Employee Retirement Income Security Act of 1974 (ERISA), critics of the independent space have popped up again, declaring that the new directive will spell the end of the industry. The regulatory burdens will be too great, the costs of doing business simply too high, and surely, they claim, no wirehouse advisor can think about transitioning their business now, right?

Certainly, the landscape is likely to change dramatically once the rule is formalized, with advisors, both independent and wirehouse, relying less and less on brokerage and product-based solutions. But in many ways, the post-DOL environment may even help in certain circumstances since many independent broker-dealers (IBDs) will likely be more eager than ever to attract top fee-based, planning-focused advisors to their firms.

Even so, wirehouse advisors mulling independence will have some things to think about as we enter a post-DOL setting. Here are three of the top post-DOL considerations for potential ‘breakaways’:

1) Will your clients follow you? For wirehouse advisors, this is the most important consideration, the regulatory environment aside. Even during times of relative calm, when markets are not whipsawing from one day to the next or when the regulatory landscape is a bit more settled and hospitable, if you cannot convince 60 percent of your clients to transition, it’s probably best to stay put.

Of course, predicting how many clients will make the jump can be tricky. No one can be sure how a client will react when they are told their advisor is uprooting his or her business. It might require winning the relationship all over again. But if, as a wirehouse advisor, you can be reasonably certain 60 percent or more will come with you, independence is still a good long and short-term proposition, even as the regulatory picture, broadly speaking, gets more challenging.

2) Are you going it alone, or do you have the resources needed to address regulatory complexities? Changing firms or building a new business can be daunting against any backdrop, but that’s especially the case in times of potentially increased regulatory complexity and regulatory-related costs. That’s why transitioning advisors need to rely on facilitating partners to make their move less stressful and enable them to operate at scale to address any regulatory roadblocks on an ongoing basis.

This is typically where Super OSJs firms have offered enormous value to former wirehouse veterans, providing them with not only top-level transition solutions but virtually the same technology, business coaching and compliance support in which they have always been accustom. Now, given what the post-DOL environment is likely to look like, with smaller IBDs continuing to consolidate with larger players, having someone to help you navigate the internal workings of the IBD will be more important than ever, meaning the importance of these kind of partnerships will only intensify.

3) Is the majority of your business already fee-based advisory in nature? Just as you’ll need to examine your book of business to decide whether clients will remain loyal, you must also study it to determine the nature of those relationships. If the substantive majority of your business is fee-based—and for the overwhelming majority of the wirehouse world, it is—the pending DOL rule is not likely to impact a transition one way or the other.

But if your practice does mostly transactional, brokerage-based business, the DOL rule is likely to have a significant impact, since no matter what the final version looks like, the days of earning commissions within an IRA are numbered. So rather than worrying about whether independence is viable, instead use this ruling as an impetus to adapt to the future regulatory environment by converting those brokerage accounts into fee relationships.

While there’s no question the regulatory environment is changing rapidly, that doesn’t mean everyone should panic once the DOL finally issues its long-awaited rule. Instead, it means wirehouse financial advisors ought to conduct a clear-headed review of their business, including being honest about how ‘sticky’ their client relationships are and the kind of work they do for them if they’re weighing a move to independence.

And if these questions don’t create more problems than solutions, independence is a good match. Remember, IBDs are expected to pursue high-quality, top producers from the wirehouse world with great vigor as the impact of the new regulations come clearer into view. Start negotiating with them now.

Steven Dudash is president of IHT Wealth Management, a Chicago-based team of experienced wealth management professionals.

IHT Wealth Management may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements.

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